THE INDONESIAN STOCK EXCHANGE (IDX)
By Novini Kumala
11303018
BACHELOR’S DEGREE in
BUSINESS ADMINISTRATION
FACULTY OF BUSINESS ADMINISTRATION & HUMANITIES
SWISS GERMAN UNIVERSITY The Prominence Tower
Jalan Jalur Sutera Barat No. 15, Alam Sutera Tangerang, Banten 15143 - Indonesia
August 2017
Revision after the Thesis Defense on 28th July 2017
Novini Kumala STATEMENT BY THE AUTHOR
I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.
Novini Kumala
_____________________________________________
Student Date
Approved by:
Margaretha Lingga, SE, MM
_____________________________________________
Thesis Advisor Date
Dr. Nila K. Hidayat, SE, MM
_____________________________________________
Dean Date
Revision after the Thesis Defense on 28th July 2017
Novini Kumala THE RELATIONSHIP OF CORPORATE REPUTATION TOWARDS
CORPORATE FINANCIAL PERFORMANCE MODERATED BY SOCIAL PERFORMANCE: ANALYSIS OF PULP AND PAPER INDUSTRY LISTED
IN THE INDONESIAN STOCK EXCHANGE (IDX)
By Novini Kumala
Margaretha Lingga, SE, MM, Advisor SWISS GERMAN UNIVERSITY
Reputation is a communication tool towards internal employees and external stakeholders by companies. Several studies shows corporate reputation has an effect towards corporate financial performance. However, corporate reputations are hard to quantify and cannot be gained in short period of time. It is gained from company history of activities that could reflect in good reputation or bad reputation over time.
Customers' point of view regarding reputation could be viewed from their purchasing behavior that could also affect financial performance of company. Besides, reputation could also be the differentiator among competitors.
Annual report and audited financial report of publicly traded pulp & paper companies listed in Indonesian Stock Exchange with time period of 2011-2016 would be used to gathered data. Questionnaire would also be used to gather primary data and then all data would be processed through SPSS Statistics. This research found there is a significant relationship of corporate reputation towards corporate financial performance. Another findings, corporate social performance does not moderated the relationship of ROA, ROE and ROIC, but moderated the relationship of ROA and ROIC. Thus, it is concluded that reputation does have relation with corporate financial performance, but corporate social performance does not moderated the relationship of reputation and financial performance.
Keywords: Corporate reputation, Corporate Financial Performance, Corporate Social Performance, CSR, IDX, Pulp & paper companies
Novini Kumala
© Copyright 2017 By Novini Kumala
All rights reserved
Novini Kumala DEDICATION
I dedicate this works for my family, lecturers, friends, future researchers, and my country.
Novini Kumala ACKNOWLEDGEMENTS
First of all, I would like to show my gratitude to God, for His blessings and guidance until current state of my life.
My family, who have always give support and encourage me all the time.
My advisor, Mrs. Margaretha Lingga for her time, expertise, guidance, and patience, as a professional and as a friend, also to all other lecturers and staff for their support in my thesis.
To all my beloved SGU friends: Adrian Mikha, Anbiya Yasmin, Andita Hasna, Adeline Vanessa, Angie Anandita,, Ari Ferdiansyah, Daryn Tjia, Dhiar Wulan, Eldon Marvin, Hanif Rizky Putra, Hugo Leo, Irdam, Kelly Widjaya, Labella Scarletta, Luthfie Fadlitama, Mercy Andrea, Renata Rosari, and Setia Budiman who made my day at university colorful and stick together through thick and thin. May someday fate be generous and let us meet again.
And to all others whose names I cannot mention one by one.
Novini Kumala TABLE OF CONTENTS
Page
STATEMENT BY THE AUTHOR ... 2
ABSTRACT ... 3
DEDICATION ... 5
ACKNOWLEDGEMENT ... 6
TABLE OF CONTENTS ... 7
LIST OF FIGURES ... 10
LIST OF TABLES ... 11
CHAPTER 1 - INTRODUCTION ... 13
1.1 Background ... 13
1.2 Research Problem ... 15
1.3 Research Question ... 16
1.4 Research Objectives ... 16
1.5 Scope and limtiation ... 16
1.6 Significance of studies ... 17
CHAPTER 2 –LITERATURE REVIEW... 18
2.1 Corporate Reputation ... 18
2.2 Corporate Financial Performance ... 20
2.2.1 Return on Asset (ROA) ... 21
2.2.2 Return on Equity (ROE) ... 21
2.2.3 Net Profit Margin (NPM) ... 22
2.3 Corporate Social Performance ... 22
2.3.1 Social Aspects (People) ... 23
2.3.2 Environmental Aspects (Planet) ... 24
2.3.3 Financial Aspects (Profit) ... 24
2.3.4 CSR Index ... 24
2.4 Previous Studies ... 25
2.5 Study Differences ... 30
2.6 Research Model ... 32
2.7 Hypothesis... 34
Novini Kumala
CHAPTER 3 – RESEARCH METHODS ... 35
3.1 Type of studies ... 35
3.2 Unit analysis... 35
3.3 Sampling ... 35
3.4 Type of Data and Collection Method ... 36
3.5 Variable Operationalization ... 36
3.6 Data Analysis Techniques ... 38
3.7 Design Analysis ... 38
CHAPTER 4 – RESULTS AND DISCUSSIONS ... 39
4.1 Brief Company Background ... 39
4.2 Company Characteristics ... 39
4.2.1 Corporate Social ResponsibilityIndex (CSRI)... 40
4.2.2 Return on Asset (ROA) ... 40
4.2.3 Return on Equity (ROE) ... 42
4.2.4 Net Profit Margin (NPM) ... 43
4.2.5 Return on Invested Capital (ROIC) ... 44
4.3 Respondent Profile ... 45
4.3.1 Respondent Career ... 45
4.3.2 Respondent Domicile ... 46
4.3.3 Respondent familiarity of firms ... 47
4.3.4 Respondent Attitude towards CSR ... 47
4.4 Descriptive Statistics ... 51
4.5 Analysis of Research Result ... 52
4.5.1 Corrrelation Test ... 53
4.5.2 Regression of Primary Model without control variables (ROA) ... 55
4.5.3 Regression of Primary Model without control variables (ROE) ... 58
4.5.4 Regression of Primary Model without control variables (NPM) ... 61
4.5.5 Regression of Secondary Model (ROA) ... 64
4.5.6 Regression of Secondary Model (ROE) ... 67
4.5.7 Regression of Secondary Model (NPM) ... 70
4.5.8 Conclusion of Results ... 73
4.6 Hypothesis Result ... 75
CHAPTER 5 – RESULTS AND DISCUSSIONS ... 78
5.1 Conclusion ... 78
5.2 Recommendation for Further Research ... 79
Novini Kumala
REFERENCES ... 84
APPENDICES ... 87
Appendix A: Corporate Social Responsibility Index ... 87
Appendix B: Corporate Reputation Questionnaire ... 91
Appendix C: Calculation... 95
Appendix D: Respondent data (processed) ... 97
Appendix E: Reliability Test for Questionnaire Results ... 101
CURRICULUM VITAE ... 102
